Magazine article Management Today

CUTTING ROOM: The Office of Fair Trading [OFT] Flicks a Wet Towel; Contractors' Lobby Swings the Other Way; Why PIN-Heads Will Swap to Switch; Michael Moore Quits on a High ... Evan Davis at Large,

Magazine article Management Today

CUTTING ROOM: The Office of Fair Trading [OFT] Flicks a Wet Towel; Contractors' Lobby Swings the Other Way; Why PIN-Heads Will Swap to Switch; Michael Moore Quits on a High ... Evan Davis at Large,

Article excerpt

I know that we're all meant to support competition and loathe monopolies, cartels and rip-off merchants. And I know we're supposed to support the Office of Fair Trading in its noble attempts to uphold fair play between business and consumers. But isn't the OFT getting a bit overzealous on behalf of the public?

It is threatening to use its powers against unfair contract clauses imposed by fitness clubs. The OFT cites as unfair: 'Lockers are provided on a daily basis only, and any items left overnight will be removed from the lockers and disposed of accordingly.' Pardon me, but I see little wrong with this clause. It might be harsh of a gym to dispose of clothes left overnight, but is it really the job of a government agency to outlaw such a rule? I can think of far worse features of modern capitalism.

The authorities in general are inclining towards excessive activism in enforcing fair trading. There was the Competition Commission report on small-business banking, which at a stroke ushered in a new era of bank price regulation. (The losers are banks such as Abbey National that are trying to break into the small-business market and now find their price advantage over expensive rivals eroded).

So why this outbreak of populist attacks on business? Why don't the authorities have more faith in the mechanism of competition they are there to uphold?

Can they not apply their own powers as judiciously as one suspects the typical gym applies its right to dispose of clothes left overnight in a locker?

One of the worst moments in my television career was a run-in with the Professional Contractors Group. The PCG exists mainly to represent IT contractors, and it was vociferous in campaigning against the IR35 measure - Gordon Brown's attempt to crack down on employees of large firms defining themselves as contractors and so paying far less tax than colleagues on employment contracts. In reporting on IR35 for Newsnight, I inadvertently exaggerated the tax loophole contractors could exploit, and found myself (and my superiors) inundated with rude e-mails from the IT industry.

The PCG argued that IR35 would force IT workers to quit Britain for countries that did not try to get them to pay tax. I found the threat implausible, and wondered whether we should bribe workers to stay by overlooking holes in the tax system. …

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